Investors should review portfolios to ensure an effective balance across asset classes to manage potential risks and ensure that returns are durable. (UBS)

In our view, this creates an opportune moment for investors. We expect decent returns across asset classes, adding to the potential upside for diversified multi-asset portfolios.


The chance of a soft landing has been rising.

  • A few months ago, inflation was well above target, the labor market was extraordinarily tight, and the financial system was straining under the pressure of higher interest rates.
  • Today, the economy looks closer to being in balance. Receding inflation has raised hopes of an imminent end to rate hikes.
  • A US recession is looking unlikely. The labor market has remained resilient and earnings have improved.

Against this backdrop, we expect decent returns across asset classes.

  • Despite the improvement in the economic outlook, global bonds and equities are little changed over the past quarter, creating an opportunity for investors.
  • We’re at a rare moment when in our base case we expect cash, bonds, stocks, and alternatives to all deliver reasonable returns.
  • That’s both over the next six to 12 months and over the longer term.

We think it's time to add exposure to diversified portfolios.

  • Adding to diversified multi-asset portfolios usually makes sense as the core of a wealth strategy.
  • The positive outlook for all major asset classes, however, makes the timing particularly opportune.
  • Part of “getting in balance” means not overallocating to cash, so it’s important to manage liquidity.

Did you know?

  • We expect decent returns across asset classes: 8–10% across MSCI developed and emerging market indexes and 10–15% for major high-quality bond indexes in US dollars, British pounds, Swiss francs, and euros by June 2024. (Bond expectations are based on indexes from Bloomberg, ICE BofA, JPMorgan, Bloomberg Barclays, Solactive, and S&P LCD.)
  • The longer-term outlook is even more positive for balanced portfolios versus cash, in our view. We expect cumulative cash returns of just 5–14% over the next five years, versus cumulative returns of 15–25% in bonds, 40–55% in stocks, and 25–65%in alternatives, based on our capital market assumptions.

Investment view

Investors should review portfolios to ensure an effective balance across asset classes to manage potential risks and ensure that returns are durable. Professionally managed solutions can enhance investors’ ability to systematically rebalance, diversify, reinvest, and access attractive underlying investments.


Main contributors - Christopher Swann, Vincent Heaney, Matthew Carter


Original report - Why invest in a balanced portfolio now?, 26 September 2023.